Question Details

[answered] 1. The _________________ budget should always be prepared f

Please write down the calculation and the for using for solving the questions.

Thank you.

1. The _________________ budget should always be prepared first.


2. Why should managers not be punished for missing a budget target? 3. Why can allocation of common costs cause inaccurate decisions to be made? 4. Sherri is going to Chicago to see her friend Ryan. She is trying to decide which is cheaper,


driving or riding the train. Following is a list of costs that Sherri has compiled in relation to


the trip.


Identify which costs are relevant (R). _________ Annual straight line depreciation on the car


_________ Cost of gasoline


_________ Annual cost of auto insurance and license fee


_________ Maintenance and repairs


_________ Parking fees at home


_________ Cost of train ticket


_________ Reduction in resale value of car due to mileage used and wear and tear


_________ Cost of putting dog in kennel while she is gone


_________ Cost of parking car in Chicago 5. Austin LTD. Manufactures a component that is used in the fans it produces. A supplier has


offered to supply the component for $25 per part. The annual requirements of Austin are


20,000 components. Austin?s cost detail of manufacturing the component is as follows:


per unit


direct materials


direct labor


variable overhead


depreciation of




supervisor's salary


general factory




total $9












$30 It was determined that the special equipment has no resale value and cannot be used for another


process. The factory overhead is an allocation and would be unaffected by the decision. The


costs above are based on the same 20,000 units that the supplier would supply.


Should Austin continue to manufacture the component or purchase it from the outside supplier?


(support your work with numbers). 6. The financial information for Jamison drug store by business line is as follows:


total drugs cosmetics housewares sales


variable expenses


contribution margin $250,000




$145,000 $125,000




$75,000 $75,000




$50,000 $50,000




$20,000 fixed expenses












insurance $50,000










$3,000 $29,500










$2,000 $12,500










$500 $8,000










$500 general




total $30,000


$125,000 $15,000


$59,000 $9,000


$38,000 $6,000


$28,000 net income/ loss $20,000 $16,000 $12,000 -$8,000 It was determined that the associated salaries, advertising and insurance would all be eliminated


if Jamison drops the housewares segment. The utilities, depreciation, rent and general and


administrative fees are all allocations.


Jamison is currently deciding whether the company would benefit overall if the housewares


business line was dropped completely, since it is losing money consistently each month. Using


what you know about avoidable and unavoidable costs, advise Jamison as their outside


consultant as to which is the better business decision. (Support your work with numbers.) 7. John Boy Lumber cuts logs to create 2 immediate joint products, lumber and sawdust.


Unfinished lumber can be sold as is for $140 or processed further at a sales price of $270.


Sawdust can be sold as is for $40 or processed further for a sales price of $50. There are


joint product costs (costs up to the split off point) allocated to each of the products ? $176 for


lumber and $24 for sawdust. The cost of further processing is $40 for lumber and $20 for




a. Should John Boy Lumber process lumber further or sell the unfinished lumber as is? b. Should John Boy Lumber process the sawdust further or sell it as is? 8. There are 2 types of capital budgeting decisions, screening decisions and preference


decisions. What is the difference between the two? 9. What is the concept of the time value of money? 10. How are flexible budgets more helpful vs. static or planning budgets? 11. Warrior Company needs a new processing machine. The company is considering 2 different


machines: machine 0178 and machine 2216. Machine 0178 costs $20,000 and will reduce


operating costs by $5,000 per year. Machine 2216 costs $15,000 and reduces operating costs


by $3,000 per year. Compute the payback for each machine and determine which should be


selected using the payback method. (show your work). 12. Why is it helpful to evaluate residual income when determining management performance


and not just focus on ROI? 13. What are the 4 perspectives of the balanced scorecard? 14. Eber Wares is a division of a major corporation. The following data are for the latest year of


operations: Required: (be sure to show your work).


i. What is the division's margin? ii. What is the division's turnover? iii. What is the division's return on investment (ROI)? iv. What is the division's residual income?


Solution details:

This question was answered on: Sep 18, 2020

PRICE: $15 (25.37 KB)

Buy this answer for only: $15

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free copy from our tutoring website (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .

About this Question






Sep 18, 2020





We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.


Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.


Order Now